● CAUTION

H&R Block

Business Services · Est. 1955 · 9,000 US Locations
⚠️ SBA Default Rate: 7.8%📊 SBA Default Rate Data Available — Unlock
Ideal Investor: Seasonal tax preparer seeking part-time income
40
$80K – $240K
Total Investment
$15K
Franchise Fee
See details
Royalty Rate
9,000
US Units
Business Services
Category
-3.5%
Growth Rate

What is H&R Block?

Founded in 1955, H&R Block operates 9,000 US locations providing tax preparation and financial services. The heritage tax franchise serves millions of consumers annually and operates seasonally with strong unit economics.

Visit H&R Block franchise website ↗

Investment & Fee Data

Investment Overview

Franchise Fee$15K
Total Investment$80K – $240K
Royalty RateSee FDD
Ad/Marketing Fund3.0%
Total Fee Burden3.0%

System Size & Growth

US Locations9,000
Unit Growth Rate-3.5%
Founded1955
Franchising Since1955
FDD Item 19Yes ✓

🔒 Premium Data Available

Avg Unit Volume (AUV)$280K
Owner Earnings$20K
SBA Default Rate7.8%
5-Year Survival83%
Unlock All Data →
💡 What This Means For You
A combined fee burden of 3.0% is well below the industry average, leaving you more room for profitability. Beyond the listed investment, expect approximately $52K in hidden costs (working capital, legal, insurance, tech fees) — bringing your realistic total closer to $212K.

Financial Performance & Risk Analysis

Financial Performance

Avg Unit Volume (AUV)$280K
Net Profit Margin10%
Est. Owner Earnings$20K
Breakeven12-16 months
Payback Period3-5 years

Capital Requirements & Operations

Liquid Capital Required$30K
Net Worth Required$100K
Staff Required3-5 (seasonal)
Training8 weeks
TerritoryAssigned territory
Multi-Unit RequiredNo
Term Length1 years

Risk & SBA Safety Data

SBA Default Rate7.8%
5-Year Survival83%
Renewal FeeAnnual (varies)
Transfer FeePer agreement
💡 Financial Analysis
A revenue-to-investment ratio of 1.8x is solid and in line with industry norms. At estimated owner earnings of $20K/year, the simple payback period is approximately 8.0 years.
🔒

Premium Data

AUV, owner earnings, SBA default rates, breakeven analysis, and operational details for H&R Block.

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Due Diligence Deep Dive

The data franchise brokers don't show you — real costs, owner lifestyle, franchisee satisfaction, exit options, and FDD transparency.

💰 True Cost of Ownership

Working Capital (6 mo)$20K
Legal & Accounting$8K
Insurance (Annual)$8K
Tech/Software (Monthly)$600/mo
Lease Deposit Est.$10K
Grand Opening$5K
Total Hidden Costs$52K

👤 Owner Reality Check

Hours Per Week20-40 (seasonal)
Absentee Owner Friendly?Yes ✓
Manager-Run Possible?Yes ✓
Seasonal VariationExtreme
Labor Cost (% of Revenue)50%
Highly seasonal. 20-40 hours/week Jan-April peak, minimal Dec-Dec off-season. Best as part-time income supplement.

📊 Franchisee Health

Satisfaction Score52/100 (Concerning)
Annual Turnover Rate14.2%
Litigation Count (Item 3)12 cases
5-Year Closure Rate15%
Avg Franchisee Tenure2 years
Franchisee AssociationYes ✓

🚪 Exit Strategy & Resale

Resale Value Multiple0.8-1.2xx earnings
Transfer RestrictionsFranchisor approval required
Non-Compete Period1 years
Non-Compete Radius3 miles
Avg Time to Sell6-12 months
Exit DifficultyVery Difficult

📋 FDD Transparency Report

Item 19 QualityMinimal
Item 19 Includes:
✓ Revenue estimate
Territory ProtectionLimited
Territory assigned
Required Suppliers?Yes
Supplier Markup RiskModerate
Renewal Terms1-year annual renewal

🚩 FDD Red Flags & Green Flags

⚠️ Watch Out For:
-3.5% unit growth7.8% SBA defaultDIY competitionExtreme seasonalityHigh turnover
✅ Positive Signals:
9,000 unit base0% royaltyLow capital entry
💡 Due Diligence Verdict
The satisfaction score of 52/100 is concerning. Low scores typically indicate poor franchisor support, unrealistic expectations set during the sales process, or conflicts over territory and fees. At 50% of revenue going to labor, staffing is your #1 cost driver. Minimum wage increases in your state could significantly impact margins.
🔍

Due Diligence Data

Hidden costs, owner hours, franchisee satisfaction, exit strategy, FDD red flags — the data that matters for H&R Block.

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AI Disruption Risk Assessment

🚨 AI Disruption Risk: Very High

92/100
AI-Proof Disruption Timeline: 2-5 years High Risk
Avoid; category extinction risk
AI Threats:
AI tax softwareAutomated tax filingIRS-provided filing
Defensive Moat:
None (commoditized)
🤖

AI Risk Analysis

See how AI will impact H&R Block over the next 5-10 years — threats, moats, and disruption timeline.

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Territory Saturation Analysis

2.68
Units per 100K pop.
0.52x
Saturation Index
vs. Business Services avg (5.13/100K)
51
States with Presence
Moderate
H&R Block has room for growth compared to category peers.

Geographic Distribution

No units
High density

Most Saturated States

State Units Population Per 100K
Washington DC208671,00031.00
Vermont197645,00030.54
Wyoming146581,00025.13
Alaska168733,00022.92
South Dakota201887,00022.66

Least Saturated States

State Units Population Per 100K
California22739,029,0000.58
Texas18930,503,0000.62
Florida16023,555,0000.68
Pennsylvania14912,961,0001.15
New York22118,777,0001.18

Growth Opportunity States

High-population states where H&R Block has minimal or no presence — potential expansion territories.

This franchise has nationwide coverage
🗺️

Premium Territory Intelligence

Interactive density heatmap, saturation metrics, and growth opportunities for H&R Block.

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Investment Thesis

H&R Block carries a CAUTION signal with a FutureScore of 40/100. A declining tax prep franchise. -3.5% unit growth, 7.8% SBA default, and $280K AUV struggling with DIY software competition. TurboTax cannibalization accelerating. Skip.

Ideal Investor Profile: Seasonal tax preparer seeking part-time income

Strengths

9,000+ unit massive base0% royalty modelRecurring seasonal business

Risk Factors

-3.5% unit growth (declining)7.8% SBA default rate (high)Tax prep commoditizationDIY tax software competition (TurboTax, TaxAct)Seasonal (only Jan-April peak)

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